Published on December 22, 2020 by Holly Porter

London and the South East Enter Tier 4 Restrictions

Tier 4 Announcement 

On Saturday, PM Boris Johnson announced Tier 4 restrictions for London and much of the South East in response to a new, more infectious strain of coronavirus.

What does this mean for retailers?

For retailers, this is devastating news. The British Retail Consortium (RBC) has predicted that the government’s ‘stop-start’ restrictions will cost retailers £2bn a week in lost sales for the third time in 2020, further endangering businesses and many thousands of jobs. On Monday morning, retail share prices plunged with Mike Ashley’s Frasers Group falling 10%, Superdry dropping 12%, and Next down by 5%.

How did the markets respond?

The markets more broadly saw great uncertainty, with the FTSE 100 tumbling by almost 3%, erasing nearly £50bn from the index of the leading UK company shares. Shares in the aviation industry saw the greatest fall, with IAG, the owner of British Airways, down by 16% and jet engine manufacturer Rolls-Royce and travel group Tui down by 9% and 7% respectively.

What does the news mean for the hospitality industry? 

For the hospitality industry, the future is equally bleak. UKHospitality, the who represent the interests of the industry, has written to the government to request proportionate financial support as well as an ‘exit strategy,’ taking into account vaccination timelines. Many cafés, bars, restaurants, and pubs believe they should be given a fresh business rates holiday lasting until 2022 and a cut on VAT from 20% to 5%. These measures would be in addition to the government’s furlough scheme.

In the past year, many have turned to supermarket-bought booze to replace pub-going. 2020 has seen purchases of lager soar, adding £800m to the nation’s grocery bill. Sales of wine and spirits have increased on last year by £717m and £567m respectively. Stand-out brands include San Miguel, which has seen sales growth of 63%, and Corona beer up by 40%.

Talking point: What are the main retail trends of 2020? Do you think the UK will face a double-dip recession? 

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New COVID Strain Sparks Border Chaos

International Travel Bans

Following the government’s announcement on Saturday, France blocked arrivals of UK passengers. This was part of wider European concern to ‘the sick man of Europe’: Britain, with Germany, Croatia, Turkey, Norway, Sweden, Finland, Italy, Ireland, Denmark, Spain and the Netherlands quickly following suit to ban incoming British flights. On Monday, India suspended all flights from the UK until the end of the year, Iran, Canada, Saudi Arabia, El Salvador and Kuwait announced temporary flight restrictions for UK passengers, and US health officials are reportedly in talks over a possible travel ban. Travel includes flights and by passenger ferry. Each country has imposed bans of varying lengths.

French Ban on Hauliers 

The main chaos at the border was caused by France’s ban on UK arrivals, which included freight lorries. Eurotunnel suspended access to its Folkstone terminal for all passenger and freight traffic. Similarly, the Port of Dover closed for all lorry traffic. Ordinarily, in the run-up to Christmas, more than 10,000 lorries traverse from Dover to Calais each day. Although the Transport Secretary Grant Shapps has assured that the issue will be resolved quickly, the Road Haulage Association has warned of the ‘devastating effect’ on supply chains. It is important to note that the typically robust supply chains are already under stress from pandemic stockpiling and uncertainty over Brexit. Britain’s second-largest supermarket by market share, Sainsbury’s, has warned that customers may see some shortages of citrus, green vegetables, and other goods imported from the continent, in the coming weeks.

Christmas Post

This, in turn, has caused Royal Mail to suspend deliveries to mainland Europe, Canada and Turkey citing the closure of the Port of Dover and international travel bans as causing ‘significant disruption’. The closures come at a bad time for delivery firms who were already experiencing a surge in demand given the increase in online shopping due to restrictions and a Black Friday backlog.

Talking point: Which is ‘Operation Stack’ and why is it important? 


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